Obamacare On the Brink of Failure in Tennessee’s Third Largest City

Could Knoxville, Tennessee be the first U.S. city where ObamaCare fails?

Should that happen, it’s likely that more than 40,000 people there will be left without options to allow them to purchase a subsidized insurance policy.

Julie McPeak

As it now stands, Humana is the only insurance provider available to consumers on the exchange there, and the company has already said they don’t plan to participate during 2018. In February, Humana issued a news release stating “based on our initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool. Therefore, the company has decided it cannot continue to offer this coverage for 2018.”

Humana made it clear where they stand on the issue.

“Based on our initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool,” Humana wrote in a news release earlier this year. “The company has decided it cannot continue to offer this coverage for 2018.”

“Right now, there are not going to be any options for you to buy any policies on the exchange and therefore there won’t be any policies using tax credits or premium subsidies,” McPeak said recently. “We do have individual insurers writing policies off of the exchange in Tennessee. Not all states have that option, but we do in Tennessee. The problem is, consumers won’t be allowed to use their premium subsidies to purchase those policies.”

According to McPeak, insurers are opting out as a result of the current climate of regulatory certainty.

“With the lack of changes in the ObamaCare regulatory environment, they are each assessing individually whether they want to participate at all in the Tennessee market. And my greater fear is that if one insurer makes the decision to withdraw, then the others will do the same because there seems to be a complete lack of interest in being the last remaining insurer in the state,” McPeak says.

At this point, there are five states, Alabama, Alaska, South Carolina, Wyoming and Oklahoma, which have only one insurer statewide on their exchange markets. Nine other states, Tennessee among them, are only served by one insurer in a majority of the counties on the exchange market.

Though it’s still unclear how Republicans intend to address changes to the Affordable Care Act, one recent study says healthcare organizations can focus on a relatively small number of scenarios as they plan for the future. The report from PwC and Strategy&, is focused on three possible outcomes: Repeal, replace or repair.

Under the repeal option, Republicans would cut budget-related ACA provisions through the budget reconciliation process and not replace them new healthcare reform provisions. Sources say this option would leave more than 32 million more Americans uninsured by the year 2025 when compared with the provisions of the current ACA.

The replacement scenario would see the ACA repealed through budget action and replaced with policies such as Medicaid block grants.

And in the “repair” scenario, lawmakers would opt to leave the vast majority of ACA dictates intact in hopes of improving and adjusting the law with bipartisan support.

The author of the report, Sundar Subramanian, a partner with Strategy&, says health insurance providers would find the “repair” most favorable. He added that healthcare providers would be better off the ACA is left alone and without radical changes.

“The bigger players that survived through that are ones that are not the most clairvoyant—they’re the ones that were the most resilient in how they thought about their strategic planning,” Subramanian notes.

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